Financial Risk Manager Part 1

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Explanation:

Since the firm restricts Barbara Stapleton to trading derivatives on exchanges and prohibits over-the-counter (OTC) derivatives, she is limited to exchange-traded products.

Futures are strictly traded on exchanges.
Options can be traded on both exchanges and over-the-counter.
Forwards and Swaps are strictly traded over-the-counter (OTC).

Thus, she is allowed to trade Options and Futures (II and IV).

Explanation:

Since the firm restricts Barbara Stapleton to trading derivatives on exchanges and prohibits over-the-counter (OTC) derivatives, she is limited to exchange-traded products.

Futures are strictly traded on exchanges.
Options can be traded on both exchanges and over-the-counter.
Forwards and Swaps are strictly traded over-the-counter (OTC).

Thus, she is allowed to trade Options and Futures (II and IV).

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Q.43 Barbara Stapleton has recently joined Ace Investments as an investment manager. Her new boss told her that she would only be trading derivatives on exchanges, and the firm does not approve the use of over-the-counter derivatives. Which of the following derivative instruments is she allowed to trade?

I. Forwards
II. Options
III. Swaps
IV. Futures

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TTitan

Last updated: May 18, 2026 at 04:39

I and II only

II and IV only

I, II and IV only

All of the above